In-depth analysis on GBPCAD - Possible bullish trend
Our pair has formed a very lovely pattern that will attract many bulls if it follows the way I will rely on.
First of all, we have a descending triangle that was recently completed. Note that this triangle is a continuation pattern so we have to see a bullish breakout somehow, but in order to make it happen we need to gather some bullish momentum that will change the trend. So a reversal pattern is essential.
The double bottom that formed right under the triangle is a very good indicator that we have a trend reversal above the neckline. So how do we trade this pattern? Of course with break & retest entry. I would never enter the specific trade without a retest because I feel that if a retest doesn't happen the bears will enter suddenly and wreck the move.
But how do we find the perfect pullback level except the neckline? With the help of fibonacci retracements. We're so lucky here because the neckline of the double bottom is also the 50% of the latest bearish impulse so we HAVE to see a retest of this level before we enter the market.
Also if we draw a our fibs from the top of the triangle to the double bottom pattern bottom, we will notice that the 50% level falls just in the start of the latest impulse so we have another indication that the whole move with eventually return there, which is also benefited from the breakout of the 61.8% of the bearish impulse which signals reversal to the 0% level.
To close this up, I'd like to point out that the pair is already overbought on 2H timeframe so that's another signal that we expect a pullback soon.
Patience is a major virtue in trading. If we manage to catch this move it will be a nice trade. If we miss the move then it will be totally fine. Another entry chance will come some other day. That's trading! Have fun!
First of all, we have a descending triangle that was recently completed. Note that this triangle is a continuation pattern so we have to see a bullish breakout somehow, but in order to make it happen we need to gather some bullish momentum that will change the trend. So a reversal pattern is essential.
The double bottom that formed right under the triangle is a very good indicator that we have a trend reversal above the neckline. So how do we trade this pattern? Of course with break & retest entry. I would never enter the specific trade without a retest because I feel that if a retest doesn't happen the bears will enter suddenly and wreck the move.
But how do we find the perfect pullback level except the neckline? With the help of fibonacci retracements. We're so lucky here because the neckline of the double bottom is also the 50% of the latest bearish impulse so we HAVE to see a retest of this level before we enter the market.
Also if we draw a our fibs from the top of the triangle to the double bottom pattern bottom, we will notice that the 50% level falls just in the start of the latest impulse so we have another indication that the whole move with eventually return there, which is also benefited from the breakout of the 61.8% of the bearish impulse which signals reversal to the 0% level.
To close this up, I'd like to point out that the pair is already overbought on 2H timeframe so that's another signal that we expect a pullback soon.
Patience is a major virtue in trading. If we manage to catch this move it will be a nice trade. If we miss the move then it will be totally fine. Another entry chance will come some other day. That's trading! Have fun!
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